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Cost recovery impact statement - Good manufacturing practice, 1 July 2013 - 30 June 2014

28 June 2013

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1. Overview

1.1 Purpose

The purpose of this Cost Recovery Impact Statement (CRIS) is to document cost recovery arrangements that the Therapeutic Goods Administration (TGA) will apply to activities associated with the manufacture of medicines. TGA regulates manufacturers through application of Good Manufacturing Practice (GMP) principles.

This CRIS will apply from July 2013 to June 2014.

1.2 Background

The TGA is a part of the Department of Health and Ageing (DoHA), responsible for evaluating the safety, quality and efficacy of medicines, medical devices and blood components available for supply in, or export from Australia. The TGA recovers the full costs of its regulatory activities through fees and charges imposed on sponsors and manufacturers of therapeutic products.

The Australian community has an expectation that therapeutic products in the marketplace are safe and of high quality, to a level equal to that of countries with comparable standards.

In Australia, manufacturers of therapeutic goods are required to hold a licence. To obtain the licence, a manufacturer must demonstrate that they have the ability to comply with manufacturing principles, which include relevant Codes of GMP and Quality Systems, and have appropriate facilities to manufacture safely. Overseas manufacturers of therapeutic goods suppled to Australia must provide evidence of compliance with equivalent GMP standards or otherwise undergo on-site inspections in the same manner as manufacturers based in Australia.

GMP is a generally accepted term internationally to describe a set of principles and procedures that, when followed by manufacturers of medicines, helps insure that the products manufactured will possess the required quality.

1.3 Australian Government cost recovery policy

In December 2002, the Australian Government adopted a formal cost recovery policy to improve the consistency, transparency and accountability of its cost recovery arrangements and promote the efficient allocation of resources. The underlying principle of the policy is that entities should set charges to recover all the costs of products or services where it is efficient and effective to do so, where the beneficiaries are a narrow and identifiable group and where charging is consistent with the Australian Government policy objectives. Cost recovery policy is administered by the Department of Finance and Deregulation and outlined in the Australian Government Cost Recovery Guidelines (Cost Recovery Guidelines).

The policy applies to all Financial Management and Accountability Act 1997 (FMA Act) agencies and to relevant Commonwealth Authorities and Companies Act 1997 (CAC Act) bodies that have been notified. In line with the policy, individual portfolio ministers are ultimately responsible for ensuring entities' implementation and compliance with the Cost Recovery Guidelines.

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